Belgian Union Fears Regionalization Of Property Taxation

By ExpatBriefing.com Editorial 14 January, 2014

Olivier Hamal, President of Belgium's national union of owners and co-owners (SNPC), has warned of the potential danger of regionalizing the taxation of real estate in Belgium in future, fearing the impact of decentralization on future property lessors and owners.

Belgium's Federal Parliament is due to vote shortly on plans to regionalize the country's Leasing Act (residential, commercial, and farm), and a substantial part of real estate taxation.

Citing the findings of a recent Eurostat study, "Taxation trends in the European Union" 2013, Hamal noted that the total weight of real estate taxes in Belgium corresponded to 3.2 percent of gross domestic product (GDP) in 2011, compared to just 0.9 percent in Germany, and 1.1 percent in the Netherlands, and to the eurozone average of 1.3 percent. According to Hamal, this high burden is primarily due to the weight of registration and inheritance taxes in Belgium.

While conceding that the current fiscal situation is far from perfect, Hamal nevertheless emphasized that it is at least balanced. However, the union is concerned that the Regions will decide to "revolutionize" the system once in charge, despite the fact that the real estate market needs stability, Hamal explained.

Hamal insisted that property owners in Belgium have a great deal to lose if the situation changes and the fiscal burden on leases is increased, given the number of Belgians investing in rental property. For many, income from a rental property is used to supplement pension income, Hamal noted. Furthermore, Hamal pointed out that a consistent rental supply ensures that rent prices are maintained at a fairly stable, low level, in which case everyone benefits.

In its 2013 publication, Eurostat revealed that property tax revenues in Belgium in relation to GDP in 2011 (3.2 percent) were the second highest in the EU (EU-27 average of 2.1 percent), after the UK (4.1 percent). The property tax represented 7.3 percent of the total tax revenue in 2011, above the EU average of 5.3 percent.

Tags: Inheritance Tax | Tax | Belgium | Netherlands | Property Tax | Gross Domestic Product (GDP) | Germany | Expats | Europe | Tax |

 





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